Answer to Question #211297 in Microeconomics for hawalul

Question

(a)   Suppose that the government puts a tax of 10cents on a liter of diesel and then later decides to put a subsidy at a rate of 5 cents a liter. What net tax is this combination equivalent to?

Answer 1

$Net tax = Gross Amount – Amount of Taxes$

$10 -5= 5$